Safe and Sound

Golden Eagle Community Bank

Woodstock, IL

4

Star Rating

Golden Eagle Community Bank is an FDIC-insured bank started in 2007 and currently headquartered in Woodstock, IL. The bank has equity of $15.7 million on assets of $159.1 million, according to December 31, 2017, regulatory filings.

U.S. bank customers have $140.6 million on deposit at 2 offices in IL run by 27 full-time employees. With that footprint, the bank currently holds loans and leases worth $115.6 million, including real estate loans of $100.7 million.

Overall, Bankrate believes that, as of December 31, 2017, Golden Eagle Community Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three important criteria Bankrate used to evaluate U.S. banks.

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is key. It works as a buffer against losses and as protection for depositors when a bank is experiencing financial trouble. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a bank's capital, Golden Eagle Community Bank received a score of 10 out of a possible 30 points, below the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Golden Eagle Community Bank's Tier 1 capital ratio was 12.64 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, Golden Eagle Community Bank held equity amounting to 9.90 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as past-due mortgages.

Having extensive holdings of these types of assets may eventually force a bank to use capital to absorb losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, decreasing earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, Golden Eagle Community Bank scored 36 out of a possible 40 points, lower than the national average of 37.49 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.22 percent of Golden Eagle Community Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Golden Eagle Community Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.

Golden Eagle Community Bank scored 10 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Golden Eagle Community Bank was 4.11 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $686,000 on total equity of $15.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.45 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.

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